Hillary Clinton cracks down on for-profit colleges after cashing in

Hillary Rodham Clinton’s plan would direct law enforcement agencies to crack down on for-profit colleges that engage in deceptive marketing, fraud, and other illegal practices.

When Hillary Rodham Clinton, the 2016 presidential candidate, unveiled her college affordability plan on Monday, she sounded every bit the critic of for-profit universities. But Mrs. Clinton, the spouse, benefited to the tune of millions of dollars from that same industry in a business relationship her husband enjoyed as recently as this spring.

Former President Bill Clinton collected more than $16 million from 2010 to 2014 as honorary chancellor of Laureate Education, a for-profit company that runs 80 education institutions around the globe, according to recently released tax returns. Four of its six U.S. colleges were flagged on the Education Department’s list of schools whose access to federal financial aid was being monitored out of concern over financial irresponsibility.

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The Clinton Foundation also lists Laureate International Universities as one of its donors, giving $1 million to $5 million during the first half of this year. Mr. Clinton praised the company when he stepped down in late April, less than two weeks after his wife officially entered the presidential race.

Over the years, Mrs. Clinton collected political donations from Laureate’s CEO, Douglas Becker, including a $2,000 donation in 2005 to her Senate re-election campaign and $2,300 in 2007 to her first presidential campaign, Federal Election Commission records show.

On Monday, Mrs. Clinton said if elected president she would get tough on federal aid that flows to those kinds of for-profit institutions, strengthening the “gainful employer rules” that requires schools to adequately prepare students for the workforce.

“There are students who take out loans to pay for an expensive degree from a for-profit institution — only to find little support once they actually enroll, or they graduate and discover that, when it comes to finding a job, their degree isn’t worth what they thought,” Mrs. Clintonsaid in a message posted on Medium.com.

Her plan also would direct law enforcement agencies to crack down on for-profits that engage in deceptive marketing, fraud, and other illegal practices.

The for-profit crackdown is part of a much broader $350 billion proposal to make college more affordable by having the federal government pick up costs, chiefly by offering taxpayer money to states to keep their public schools’ costs lower.

She proposed $175 billion over a decade in grants to states that keep costs low enough that students wouldn’t need to go into debt to cover tuition at four-year public schools and private nonprofit colleges. States and colleges would be responsible for holding down costs as part of the deal.

More funding would go to 25 million borrowers, helping them refinance their student loans with lower interest rates, and the rest would go to an “innovation fund” to support new models of higher education.

“No family and no student should have to borrow to have to pay tuition at a public college or university,” Mrs. Clinton told reporters. “Everyone who has student debt should be able to refinance it at lower rates. Cost won’t be a barrier, and debt won’t hold you back under my plan.”

Mrs. Clinton plans to pay for her plan by capping the itemized deductions that wealthier families can claim on tax returns.

The plan already has turned controversial, particularly with the big price tag, and with pressure from her political left, where many Democrats want the government to eliminate tuition and fees altogether.

Sen. Bernard Sanders, a Vermont independent who is challenging Mrs. Clinton for the Democratic presidential nomination, has called for $70 billion a year in spending, with two-thirds coming from the federal government and one-third from the states, to cover the costs of education at public colleges.

The American Federation of Teachers, which has endorsed Mrs. Clinton’s candidacy, sprang to her defense Monday, saying her plan is a sustainable way of lowering the level of student debt, which has crested at $1 trillion in total.

Former Florida Gov. Jeb Bush, a Republican presidential candidate, said the proposal was irresponsible and would suppress economic growth.

“We don’t need more top-down Washington solutions that will raise the cost of college even further and shift the burden to hardworking taxpayers,” he said.

Neal McCluskey, director of the libertarian Cato Institute’s Center for Educational Freedom, said piling on government subsidies will drive up college costs because students don’t think how much higher education they’re consuming.

“At least now we have astronomical price inflation to pretty clearly show Americans how much college is costing them. Heap much bigger subsidies directly on schools, and that cost is much harder to see, prompting even more people to spend more time in college learning less useful stuff,” he said.

Even more scrutiny could come from the Clintons’ own tango with for-profit colleges.

Mr. McCluskey said it was “curious that Mrs. Clinton takes some shots at for-profit colleges in her plan while Mr. Clinton made millions as an honorary chancellor for a for-profit education firm.”

“It may well be, though, that they saw value in one provider, but Ms. Clinton is suspicious of the industry overall,” he said.

appeared on a list of colleges the Education Department singled out for increased oversight, a practice known as “heightened cash monitoring.”

Each of the schools fell into a less-stringent tier of scrutiny known as HCM1, and Mr. Clinton praised the institution on his way out in April.

“Laureate students represent the next generation of leadership,” he said in a statement posted on the university’s website. “I have seen a commitment to quality and leadership throughout the Laureate network, and I have enjoyed being a part of it.”

A Laureate spokesman could not be reached for comment Monday on the status of the colleges under heightened monitoring, or the extent to which Mrs. Clinton’s proposals might affect them.